UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-Q




x
                      QUARTERLY
      REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934
                        for
      the quarterly period ended June 30, 2009o
                      TRANSITION
      REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934for the transition period from
      __________to
      __________




Commission
file number:  333-150768





UNIVERSAL SOLAR TECHNOLOGY,
INC.


(Exact
name of registrant as specified in its charter)





Nevada
            
            26-0768064(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)No.
      1 Pingbei Road 2,
              Nanping
      Science & Technology Industrial Park,
              Zhuhai
      City, Guangdong Province,
              The
      People’s Republic of China
            
            519060(Address
      of principal executive offices)
            
            (Zip
      Code)





86-756-8682610


(Registrant’s
telephone number, including area code)





(Former
name, former address and former fiscal year, if changed since last
report)





Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.  Yes xNo o




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes oNo o




Indicate
by check mark whether the registrant is a large accelerate filer, an accelerate
filer, a non-accelerated filer, or a smaller reporting company.  See
the definition of “large accelerated filer,” accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):




Large
      accelerated filer
                o
                Accelerated
      filer
                oNon-accelerated
      filer
                o
                Smaller
      reporting company
                x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes oNo x




Indicate
the number of shares outstanding of each of the issuer's classes of common stock
$0.0001 par value per share, as of August 7, 2009 was 22,599,974shares.










TABLE
OF CONTENTS





PART I - FINANCIAL
      INFORMATIONItem
      1. Financial Statements
            1Item
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
            9Item
      3.Quantitative and Qualitative Disclosures About Market
    Risk
            12Item
      4T. Controls and Procedures
            12PART
      II - OTHER INFORMATIONItem
      1. Legal Proceedings
            13Item
      1A. Risk Factors
            13Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
            13Item
      3. Defaults Upon Senior Securities
            13Item
      4. Submission of Matters to a Vote of Security Holders
            13Item
      5. Other Information
            13Item
      6. Exhibits
            13SIGNATURES
            14




Except
as otherwise required by the context, all references in this report to "we",
"us”, "our", “Universal Solar Technology” or "Company" refer to the consolidated
operations of Universal Solar Technology, Inc., and its wholly owned
subsidiaries.









PART
I. FINANCIAL INFORMATION





Item
1. Financial Statements.




UNIVERSAL
      SOLAR TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSASSETSJune
      30,
                                    2009
                                  
                                  
                                  December
      31,
                                    2008(Unaudited)
                                  
                                  
                                  (Audited)CURRENT
      ASSETS:Cash
                                  
                                  $
                                  491,140
                                  
                                  
                                  $
                                  259,025Prepaid expenses and other current
      assets
                                  
                                  
                                  54,154
                                  
                                  
                                  
                                  26,666TOTAL
      CURRENT ASSETS
                                  
                                  
                                  545,294
                                  
                                  
                                  
                                  285,691Deposits
      for future deliveries of equipment
                                  
                                  
                                  237,330
                                  
                                  
                                  
                                  -Land
      use right, net of accumulated amortizationof $6,167 and $0,
      respectively
                                  
                                  
                                  416,677
                                  
                                  
                                  
                                  423,420Property
      and equipment, net of accumulated depreciationof
      $59 and $0, respectively
                                  
                                  
                                  47,688
                                  
                                  
                                  
                                  -TOTAL
      ASSETS
                                  
                                  $
                                  1,246,989
                                  
                                  
                                  $
                                  709,111LIABILITIES
      AND STOCKHOLDERS' DEFICIENCYCURRENT
      LIABILITIES:Accounts payable and accrued
      expenses
                                  
                                  $
                                  41,667
                                  
                                  
                                  $
                                  42,450Due
      to related parties-current portion
                                  
                                  
                                  1,352,476
                                  
                                  
                                  
                                  749,298TOTAL
      CURRENT LIABILITIES
                                  
                                  
                                  1,394,143
                                  
                                  
                                  
                                  791,748Due
      to related parties- non-current portion
                                  
                                  
                                  22,485
                                  
                                  
                                  
                                  22,485TOTAL
      LIABILITIES
                                  
                                  
                                  1,416,628
                                  
                                  
                                  
                                  814,233STOCKHOLDERS'
      DEFICIENCY:Preferred stock, $0.0001 par
      value,10,000,000 shares
      authorized,0 shares issued and
      outstanding
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Common stock, $0.0001 par
      value,90,000,000 shares
      authorized,22,574,974
      shares issued and outstanding
                                  
                                  
                                  2,257
                                  
                                  
                                  
                                  2,257Additional paid-in
      capital
                                  
                                  
                                  436,697
                                  
                                  
                                  
                                  416,273Deficit
                                  
                                  
                                  (617,734
                                  )
                                  
                                  
                                  (503,904
                                  )Accumulated
      other comprehensive income (loss)
                                  
                                  
                                  9,141
                                  
                                  
                                  
                                  (19,748
                                  )TOTAL
      STOCKHOLDERS' DEFICIENCY
                                  
                                  
                                  (169,639
                                  )
                                  
                                  
                                  (105,122
                                  )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                                  
                                  $
                                  1,246,989
                                  
                                  
                                  $
                                  709,111






See notes
to consolidated financial statements.




1




UNIVERSAL
      SOLAR TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF
      OPERATIONS(Unaudited)Three
      Months
                          
                          
                          Three
      Months
                          
                          
                          Six
      Months
                          
                          
                          Six
      Monthsended
                          
                          
                          ended
                          
                          
                          ended
                          
                          
                          endedJune
      30, 2009
                          
                          
                          June
      30, 2008
                          
                          
                          June
      30, 2009
                          
                          
                          June
      30, 2008SALES
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          660,051
                          
                          
                          $
                          -COSTS
      AND EXPENSES:Cost of goods
      sold
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          589,460
                          
                          
                          
                          -Selling,
      general and administrative expenses
                          
                          
                          78,717
                          
                          
                          
                          173,506
                          
                          
                          
                          162,197
                          
                          
                          
                          204,077TOTAL
      COSTS AND EXPENSES
                          
                          
                          78,717
                          
                          
                          
                          173,506
                          
                          
                          
                          751,657
                          
                          
                          
                          204,077LOSS
      FROM OPERATIONS
                          
                          
                          (78,717
                          )
                          
                          
                          (173,506
                          )
                          
                          
                          (91,606
                          )
                          
                          
                          (204,077
                          )Dividend
      and interest income-net
                          
                          
                          (11,566
                          )
                          
                          
                          (6,000
                          )
                          
                          
                          (19,805
                          )
                          
                          
                          (6,000
                          )Gain
      (loss) on foreign currency transactions
                          
                          
                          (2,165
                          )
                          
                          
                          -
                          
                          
                          
                          (2,419
                          )
                          
                          
                          -NET
      LOSS
                          
                          
                          (92,448
                          )
                          
                          
                          (179,506
                          )
                          
                          
                          (113,830
                          )
                          
                          
                          (210,077
                          )OTHER
      COMPREHENSIVE INCOME (LOSS):Foreign
      currency translation adjustment
                          
                          
                          438
                          
                          
                          
                          7,023
                          
                          
                          
                          28,889
                          
                          
                          
                          22,144COMPREHENSIVE
      INCOME (LOSS)
                          
                          $
                          (92,010
                          )
                          
                          $
                          (172,483
                          )
                          
                          $
                          (84,941
                          )
                          
                          $
                          (187,933
                          )Loss per common share -basic and
      diluted
                          
                          $
                          (0.00
                          )
                          
                          $
                          (0.01
                          )
                          
                          $
                          (0.00
                          )
                          
                          $
                          (0.01
                          )Weighted average number of shares
      outstanding-basic and
      diluted
                          
                          
                          22,574,974
                          
                          
                          
                          20,942,408
                          
                          
                          
                          22,574,974
                          
                          
                          
                          20,646,364






See notes
to consolidated financial statements.




2




UNIVERSAL
      SOLAR TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY(Unaudited)COMMON
                        
                        
                        ADDITIONAL
                        
                        
                        
                        
                        
                        OTHERSTOCK
                        
                        
                        PAID-IN
                        
                        
                        ACCUMULATED
                        
                        
                        COMPREHENSIVESHARES
                        
                        
                        AMOUNT
                        
                        
                        CAPITAL
                        
                        
                        DEFICIT
                        
                        
                        INCOME
                        
                        
                        TOTALBALANCE
      - DECEMBER 31, 2008
                        
                        
                        22,574,974
                        
                        
                        $
                        2,257
                        
                        
                        $
                        416,273
                        
                        
                        $
                        (503,904
                        )
                        
                        $
                        (19,748
                        )
                        
                        $
                        (105,122
                        )Imputed
      interest on shareholder loan
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        20,424
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        20,424Foreign
      currency translation adjustment
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        28,889
                        
                        
                        
                        28,889Net
      Income (loss)
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (113,830
                        )
                        
                        
                        -
                        
                        
                        
                        (113,830
                        )BALANCE
      - MARCH 31, 2009
                        
                        
                        22,574,974
                        
                        
                        $
                        2,257
                        
                        
                        $
                        436,697
                        
                        
                        $
                        (617,734
                        )
                        
                        $
                        9,141
                        
                        
                        $
                        (169,639
                        )






See notes
to consolidated financial statements.




3




UNIVERSAL
      SOLAR TECHNOLOGY INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWS(Unaudited)Six
      Months
                              
                              
                              Six
      MonthsEnded
                              
                              
                              EndedJune
      30, 2009
                              
                              
                              June
      30, 2008OPERATING
      ACTIVITIES:Net loss
                              
                              $
                              (113,830
                              )
                              
                              $
                              (210,077
                              )Adjustments
      to reconcile net loss to netcash
      used in operating activities:Imputed
      interest on stockholder loan
                              
                              
                              20,424
                              
                              
                              
                              6,000Stock
      issued for services
                              
                              
                              -
                              
                              
                              
                              9,423Depreciation
      of property and equipment
                              
                              
                              59
                              
                              
                              
                              -Amortization
      of land use right
                              
                              
                              6,171
                              
                              
                              
                              -Changes
      in operating assets and liabilities:Prepaid expenses and other current
      assets
                              
                              
                              (27,488
                              )
                              
                              
                              (4,817
                              )Accounts payable and accrued
      expenses
                              
                              
                              (783
                              )
                              
                              
                              (17,500
                              )NET
      CASH USED IN OPERATING ACTIVITIES
                              
                              
                              (115,447
                              )
                              
                              
                              (216,971
                              )INVESTING
      ACTIVITIES:Deposits
      for future deliveries of equipment
                              
                              
                              (237,492
                              )
                              
                              
                              -Property
      and equipment additions
                              
                              
                              (47,779
                              )
                              
                              
                              -NET
      CASH USED IN INVESTING ACTIVITIES
                              
                              
                              (285,271
                              )
                              
                              
                              -FINANCING
      ACTIVITIES:Increase
      (decrease) in due to related parties
                              
                              
                              612,685
                              
                              
                              
                              338,331NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                              
                              
                              612,685
                              
                              
                              
                              338,331EFFECT
      OF EXCHANGE RATE CHANGES ON CASH
                              
                              
                              20,148
                              
                              
                              
                              22,144INCREASE
      (DECREASE) IN CASH
                              
                              
                              232,115
                              
                              
                              
                              143,504CASH
      - BEGINNING OF PERIOD
                              
                              
                              259,025
                              
                              
                              
                              91,184CASH
      - END OF PERIOD
                              
                              $
                              491,140
                              
                              
                              $
                              234,688Supplemental
      disclosures of cash flow information:Interest
      paid
                              
                              $
                              -
                              
                              
                              $
                              -Income
      taxes paid
                              
                              $
                              -
                              
                              
                              $
                              -
   See
notes to consolidated financial statements.




4




UNIVERSAL
SOLAR TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 June 30,
2009
 (Unaudited)


1. INTERIM FINANCIAL
STATEMENTS





The
unaudited financial statements as of June 30, 2009 and for the three and six
months ended June 30, 2009 and 2008 have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial information and with instructions to Form 10-Q.  In the
opinion of management, the unaudited financial statements have been prepared on
the same basis as the annual financial statements and reflect all adjustments,
which include only normal recurring adjustments, necessary to present fairly the
financial position as of June 30, 2009 and the results of operations and cash
flows for the periods ended June 30, 2009 and 2008. The financial data and other
information disclosed in these notes to the interim financial statements related
to these periods are unaudited.  The results for the three and six
months ended June 30, 2009 is not necessarily indicative of the results to be
expected for any subsequent quarter of the entire year ending December 31,
2009.  The balance sheet at December 31, 2008 has been derived from
the audited financial statements at that date.





Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States have been condensed or omitted pursuant to the Securities and
Exchange Commission’s rules and regulations.  These unaudited
financial statements should be read in conjunction with our audited financial
statements and notes thereto for the year ended December 31, 2008 as included in
our report on Form 10-K.





The
Company has evaluated subsequent events through the filing date of this Form
10-Q and determined that there were no subsequent events to recognize or
disclose in these financial statements.





2.
ORGANIZATION AND BUSINESS OPERATIONS





Universal
Solar Technology, Inc. (the “Company”) was incorporated in the State of Nevada
on July 24, 2007.  The Company operates through its wholly-owned
subsidiaries, Kuong U Science & Technology (Group) Ltd. (“Kuong U”), a
company incorporated in Macau, Peoples Republic of China (“PRC”) on May 10,
2007, and Nanyang Universal Solar Technology Co., Ltd. (“NUST”), a company
incorporated in Nanyang, PRC on September 8, 2008.  The Company sells
solar photovoltaic (“PV”) modules.





The
financial statements have been prepared on a "going concern" basis, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. At June 30, 2009, the Company had negative working
capital of $848,849 and a stockholders’ deficiency of $169,639. Further, the
Company has incurred net losses of $617,734  since inception. These
factors raise substantial doubt as to the Company’s ability to continue as a
going concern. The Company plans to improve its financial condition by raising
capital in a private placement of its securities. However, there is no assurance
that the Company will be successful in accomplishing this objective. The
financial statements do not include any adjustments that might be necessary
should the Company be unable to continue as a going concern.




5




UNIVERSAL
SOLAR TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 June 30,
2009
 (Unaudited)


3.
LAND USE RIGHT





On December 1, 2008,NUST acquiredthe right to use a parcel of landapproximating  71,280 square metersfor forty(40)years for its office and production
facilities from the local government in the PRC.  The costof RMB 2,886,300 ($422,843
translated at theJune30, 2009 exchange rate) is being amortized
using the straight line method over the 40 year term of the
contract.




4.DUE TO RELATED
PARTIES





Due to related parties consist
of:




June30,
                
                
                December
31,2009
                
                
                2008Due to Company’s chairman and chief
      executive  officer for chairman’s payment of various
      professional fees and
      other expenses on behalf of the Company, non-interest bearing, due on
      demand(interest
      imputed at 5%)
                
                $
                906,716
                
                
                $
                698,836Due to Zhuhai Yuemao Laser
      Facility Engineering Co., Ltd.  (“Yuemao Laser”) , a PRC company controlled by
      the
      Company’s chairman and chief executive
      officer, non-interest bearing, due on demand
                
                
                445,760
                
                
                
                50,462Due to Company’s chairman and chief executive
      officer pursuant to loan agreement dated November 2, 2008, interest at 5%,
      due November 1, 2013
                
                
                22,485
                
                
                
                22,485Total
                
                
                1,374,961
                
                
                
                771,783Current
    portion
                
                
                (1,352,476
                )
                
                
                (749,298
                )Non-current
      portion
                
                $
                22,485
                
                
                $
                22,485




6




UNIVERSAL
SOLAR TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 June 30,
2009
 (Unaudited)


5. RELATED PARTY
TRANSACTIONS





In thesixmonths endedJune 30, 2009, Kuong U purchased solar PVmodules from Yuemao Laser
at a total cost of $589,460and sold the modules to two customers
for total sales of $660,051.





The company rents its executive office
space from the Company’s chairman and chief executive officer
under a verbal month to month agreement. Rent expense for thesixmonths endedJune30, 2009 and 2008 was $8,256and $8,388, respectively.




6. MAJOR CUSTOMER





In thesixmonths endedJune30, 2009, one customer located inIndiaaccounted for approximately 97% of
sales. Under the terms ofthese sales, the Company is obligated to replace nonworking modules for a period
of one year from the date of deliveries.




7.COMMITMENTS AND
CONTINGENCIES





Prototype
Product Development Agreement





On April 29, 2008, Kuong U entered into
an agreement with Yuemao
Laser whereby Yuemao Laser is to develop certain prototype solar energy products
forKuongU.Under the agreement, Kuong U is
obligatedto pay a royalty
fee quarterlyto Yuemao
Laser equal to 1% of Kuong U’s sales from the prototype
products.





Equipment
Agreements





On February 19, 2009 and February 23,
2009, NUST contracted to acquire certain production equipment for a total of
10,600,000 RMB( $1,552,900 translated at theJune 30, 2009 exchange rate). The agreements
provide for NUST’s payment of certain deposits prior to the delivery of
the equipment. As ofJune30, 2009, a total of1,620,000RMB ($237,330translated at theJune30, 2009 exchange rate) has been paid to
the vendors.





Vulnerability due to
Operations in PRC





The
Company’s operations may be adversely affected by significant political,
economic and social uncertainties in the PRC.  Although the PRC
government has been pursuing economic reform policies for more than 20 years,
there is no guarantee that the PRC government’s pursuit of economic reforms will
be consistent or effective.





The PRC
has adopted currency and capital transfer regulations.  These
regulations require that the Company comply with complex regulations for the
movement of capital. Because  most of the Company’s future revenues
will be in RMB, any inability to obtain the requisite approvals, or any future
restrictions on currency exchanges, will limit the Company’s ability to fund its
business activities outside China or to pay dividends to its
shareholders.




7




UNIVERSAL
SOLAR TECHNOLOGY, INC. AND SUBSIDIARIES
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 June 30,
2009
 (Unaudited)


The
Company’s assets will be predominantly located inside China.  Under
the laws governing foreign invested enterprises in China, dividend distribution
and liquidation are allowed, but subject to special procedures under the
relevant laws and rules. Any dividend payment will be subject to the decision of
the board of directors and subject to foreign exchange rules governing such
repatriation.  Any liquidation is subject to both the relevant
government agency’s approval and supervision, as well as the foreign exchange
control.





In
addition, the results of business and prospects are subject, to a significant
extent, to the economic, political and legal developments in China.





While
China’s economy has experienced significant growth in the past twenty years,
growth has been irregular, both geographically and among various sectors of the
economy.  The Chinese government has implemented various measures to
encourage economic growth and guide the allocation of resources.  Some
of these measures benefit the overall economy of China, but may also have a
negative effect on the Company.  The Company’s sales and financial
condition may be adversely affected by the government control over capital
investments or changes in tax regulations.





Foreign
companies conducting operations in the PRC face significant political, economic
and legal risks.  The Communist regime in the PRC includes a stifling
bureaucracy which may hinder Western investment. Any new government regulations
or utility policies pertaining to the Company’s PV products may result in
significant additional expenses to the Company, Company distributors and end
users and, as a result, could cause a significant reduction in demand for the
Company’s PV products





8





Information  Regarding
Forward-Looking Statements




The
following discussion contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 relating to future events or our future performance. Actual
results may materially differ from those projected in the forward-looking
statements as a result of certain risks and uncertainties set forth in this
report. Although management believes that the assumptions made and expectations
reflected in the forward-looking statements are reasonable, there is no
assurance that the underlying assumptions will, in fact, prove to be correct or
that actual results will not be different from expectations expressed in this
report.





Item
2.  Management’s Discussion and Analysis of Financial Condition and Results
of Operations.




The
following discussion should be read in conjunction with the Financial Statements
and Notes thereto appearing elsewhere in this Form 10-Q.




Overview





Universal
Solar Technology, Inc. was incorporated in the State of Nevada on July 24, 2007.
It operates through its wholly owned subsidiary, Kuong U Science &
Technology (Group) Ltd. (“Kuong U”), a company incorporated in
Macau, Special Administrative Region of the People's Republic of China
(Macau SARC) on May 10, 2007.





We are
focusing on becoming a vertically integrated designer, manufacturer, and
distributor of silicon ingots, wafers and high efficiency solar PV products.
Currently we market high efficiency solar PV modules and sloar lighting systems
while outsourcing the current production of these products to a related third
party. We are developing our own vertically integrated manufacturing center
based in Nanyang which is located in Henan Province in China. The manufacturing
center is being built to allow for rapid integration and scalability across each
production phase. The production departments will consist of silicon ingot
production lines, silicon wafer production lines, PV modules and system
production lines, and solar lighting assembly lines. The production departments
are scheduled to be completed in phases. We expect all of the departments to be
completed and operational by April 2010. As each production area completes
testing and the initial launch of production, additional manufacturing lines,
equipment and staffing will be added over time. We believe this vertically
integrated manufacturing center, when completed, will enable us to compete
aggressively with our competitors while avoiding potential disruptions to
business and operations due to supply issues.





Limited
Operating History; Need For Additional Capital





There is
no historical financial information about us upon which to base an evaluation of
our performance. We cannot guarantee that we will be successful in our business
operations. Our business is subject to risks inherent in the establishment of a
new business enterprise, including limited capital resources and possible cost
overruns due to price and cost increases in services and products.





To become
profitable, we have to sell our products and generate revenue. In addition,
because our new WFOE manufacturing setup in China will require additional
investment, we are seeking both equity and debt financing to provide the capital
required to implement our business plan in China.




We have
no assurance that future financing will be available to us on acceptable terms.
If financing is not available on satisfactory terms, we may be unable to
continue, develop or expand our operations into China. Equity financing could
result in additional dilution to existing shareholders.




9




RESULTS
OF OPERATIONS





Comparison
of Three Months Ended June 30, 2009 to June 30, 2008





Revenue.We did not generate any
revenue for the three months ended June 30, 2009 and 2008. Because our
Nanyang  manufacturing facilities have not been completed yet, we have
minimized marketing efforts. We made outsource sales to two customers in the
first quarter 2009 but none in the second quarter 2009.





Cost of Sales.  Our
cost of sales were $0 for the quarters ended June 30, 2009 and June 30, 2008 due
to the fact that we did not sell any products during those periods.





Selling, General and Administrative
Expenses.  Selling, general and administrative expenses
decreased by $94,789 or 54.63% to $78,717 for the quarter ended June 30, 2009
from $173,506 for the same period in 2008. The decrease was mainly due lower
professional fees in 2009. The higher professional fees in 2008 were associated
with our registration statement on From S-1 filed on May 9, 2008 which was
declared effective on June 30, 2008.





Net Loss.  Net loss
decreased by $87,058 or 48% from $179,506 for the quarter ended June 30, 2008 to
$92,448 for the same period in 2009.  The decrease in net loss is
mainly due to the decrease in selling, general and administrative expenses for
reasons discussed above.





Comparison
of Six Months Ended June 30, 2009 to June 30, 2008





Revenue.  Our
revenue for the quarter ended June 31, 2009 was $660,051 compared to $0 for the
six months ended June 30, 2008. The increase was due to limited sales of
products manufactured by a related party during the first quarter in
2009.





Cost of Sales.  Our
cost of sales increased from $0 for the six months ended June 30, 2008 to
$589,460 for the six months ended June 30, 2009. The increase was mainly due to
expenses associated with the limited sales of products manufactured by a related
party during the first quarter in 2009.





Selling, General and Administrative
Expenses.  Selling, general and administrative expenses
decreased by $41,880 or 20.5% from $204,077 for the period ended June 30, 2008
to $162,197.  This decrease was mainly due to the decrease of
professional fees for the first quarter discussed above.





Net Loss.  Net loss
decreased by $96,247 or 45.8% from $210,077 for the six months ended June 30,
2009 as compared to $113,830 for the six months ended June 30, 2008. This
decrease was mainly due to the decrease of selling, general and administrative
expenses during the six months ended June 30, 2009 and the limited revenue
generated form the sales of products manufactured by a related party during the
first quarter in 2009.





LIQUIDITY
AND CAPITAL RESOURCES





As of
June 30, 2009, we had total assets of $1,246,989 and total liabilities of
$1,416,628 and we had cash of $491,140.





Net cash
used in operating activities for the six months ended June 30, 2009 was $115,447
which is a decrease of $101,524 from net cash used in operating activities of
$216,971 for the same period in 2008.  The reason for the $101,524
improvement was primarily to the $96,247 reduced net loss.





Net cash
used in investing activities for the quarter ended June 30, 2009 was $285,271,
an increase from $0 for the same period in 2008. This increase was due to
deposits for future deliveries of equipment and acquisition of property and
equipment.





Net cash
provided by financing activities for the quarter ended March 31, 2009 was
$612,685, compared to $338,331 from the same period in 2008. This increase was
due to an increase in loans from related parties.




10




We are
actively seeking additional external funding, but to date we have not
consummated any financing transactions other than our public offering and
transactions with related parties.





Without
additional funding, the Company will not be able to pursue its business model.
If adequate funds are not available or are not available on acceptable terms
when required, we would be required to significantly curtail our operations and
would not be able to fund the development of the business envisioned by our
business model.  These circumstances could have a material adverse
effect on our business and result in our inability to continue to operate as a
going concern.





CRITICAL
ACCOUNTING POLICIES





Basis
of presentation





The
consolidated financial statements include the accounts of the Company and all of
its subsidiaries.  All significant inter-company accounts and
transactions have been eliminated. These financial statements have been prepared
in conformity with accounting principles generally accepted in the United States
of America.





Certain
amounts included in the 2008 financial statement have been reclassified to
conform to the 2009 financial statement presentation.





Property
and equipment




Property
and equipment are recorded at cost.  Depreciation is provided in
amounts sufficient to amortize the cost of the related assets over their useful
lives using the straight line method for financial reporting
purposes.




Nanyang
UST obtained the right to use a parcel of land for its office and production
facilities.  Pursuant to the contract from the local government of the
PRC, the contract expires in 2048.  This land use right was recorded
at cost and is being amortized over the life of the lease.




Maintenance,
repairs and minor renewals are charged to expense when
incurred.  Replacements and major renewals are
capitalized.





Impairment
of long-lived assets


The
Company accounts for the impairment of long-lived assets in accordance with SFAS
No. 144, “Accounting for the
Impairment or Disposal of Long-Lived Assets”.  Long-lived
assets are reviewed for impairment when circumstances indicate the carrying
value of an asset may not be recoverable.  For assets that are to be
held and used, an impairment is recognized when the estimated undiscounted cash
flows associated with the asset or group of assets is less than their carrying
value.  If impairment exists, an adjustment is made to write the asset
down to its fair value, and a loss is recorded as the difference between the
carrying value and fair value.  Fair values are determined based on
quoted market values, discounted cash flows or internal and external appraisals,
as applicable.  Assets to be disposed of are carried at the lower of
carrying value or estimated net realizable value.





Research
and development costs





Research
and development costs are charged to expenses as incurred.





Deferred
income taxes





The
Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 (ASFAS 109") which
requires that deferred tax assets and liabilities be recognized for future tax
consequences attributable to differences between financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases.  In addition, SFAS 109 requires recognition of future tax
benefits, such as carryforwards, to the extent that realization of such benefits
is more likely than not and that a valuation allowance be provided when it is
more likely than not that some portion of the deferred tax asset will not be
realized.




11




Currency
translation





The
reporting currency of the Company is the United States dollar. The functional
currency of Kuong U is the Hong Kong dollar. The functional currency of NUST is
the Chinese Yuan (”RMB”).  Revenue and expense accounts of our two
subsidiaries are translated into United States dollars at the average rates
during the period, and balance sheet items are translated at year-end
rates.  Translation adjustments arising from the use of differing
exchange rates from period to period are included as a separate component of
shareholders’ equity.  Gains and losses from foreign currency
transactions are recognized in current operations.





The RMB
is not freely convertible into foreign currency and all foreign exchange
transactions must take place through authorized institutions. No representation
is made that the RMB amounts could have been, or could be, converted into USD at
the rates used in translation.





Comprehensive
income (loss)





Comprehensive
income (loss) is defined to include all changes in equity except those resulting
from investments by shareholders and distributions to
shareholders.  Among other disclosures, all items that are required to
be recognized under current accounting standards as components of comprehensive
income (loss) are required to be reported in a financial statement that is
presented with the same prominence as other financial
statements.  Comprehensive income includes net income (loss) and the
foreign currency translation adjustment, net of tax.





NEW
ACCOUNTING PRONOUNCEMENTS





In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations, and
SFAS No. 160, Non-controlling
Interests in Consolidated Financial Statements.  SFAS 141 (R)
requires an acquirer to measure the identifiable assets acquired, the
liabilities assumed, and any non-controlling interest in the acquiree at their
fair values on the acquisition date, with goodwill being the excess value over
the net identifiable assets acquired.  SFAS No. 160 clarifies that a
non-controlling interest in a subsidiary should be reported as equity in the
consolidated financial statements.  SFAS No. 141 (R) and SFSS No. 160
are effective for financial statements issued for fiscal years beginning after
December 15, 2008.  Early adoption is prohibited.  The
Company has not yet determined the effect on its financial statements, if any,
upon adoption of SFAS No. 141 (R) or SFAS No.
160.     SFAS 141 (R) will significantly affect the
accounting for future business combinations and the Company will determine the
accounting as new combinations are determined.





EITF
Issue 07-1, Accounting for
Collaborative Arrangements Related to the Development and Commercialization of
Intellectual Propertyis effective for financial statements issued for
fiscal years beginning after December 15, 2008.  This issue addresses
the income statement classification of payments made between parties in a
collaborative arrangement.  The adoption of EITF07-1 is not expected
to have a significant impact on the Company’s results of operations, cash flows
or financial position.





Item
3.  Quantitative and Qualitative Disclosures About Market Risk





Not
required.




Item 4T. Evaluation of Disclosure Controls and
Procedures





a) Evaluation of Disclosure Controls
and Procedures. Under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
we conducted an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end
of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation
Date”). The purpose of this evaluation is to determine if, as of the Evaluation
Date, our disclosure controls and procedures were operating effectively such
that the information, required to be disclosed in our Securities and Exchange
Commission (“SEC”) reports (i) was recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms, and (ii) was
accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure.




12




Based on
this evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that, as of the Evaluation Date, our disclosure controls and
procedures were operating effectively.




(b) Changes in Internal Control
over Financial Reporting.  The Company’s management, with the
participation of the Chief Executive Officer and Chief Financial Officer, has
evaluated the Company’s internal control over financial reporting, as defined in
Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended, during the
fiscal quarter covered by this report, and they have concluded that there was no
change to the Company’s internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.





PART
II - OTHER INFORMATION


Item
1.    Legal Proceedings.




None.





Item
1A.    Risk Factors.





As of the
date of this filing, there have been no material changes from the risk factors
disclosed in the Company’s Annual Report on Form 10-K filed on April 10,
2009. We operate in a changing environment that involves numerous known and
unknown risks and uncertainties that could materially affect our operations. The
risks, uncertainties and other factors set forth in our Annual Report on
Form 10-K may cause our actual results, performances and achievements to be
materially different from those expressed or implied by our forward-looking
statements. If any of these risks or events occurs, our business, financial
condition or results of operations may be adversely affected.





Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.





None.





Item
3.    Defaults Upon Senior Securities.




None.




Item
4.   Submission of Matters to a Vote of Security Holders.




None.




Item
5.   Other Information.




None.




Item
6.   Exhibits.




Exhibit No.
                  
                  Title of Document31.1
                  
                  Certification
      of Principal Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
      promulgated under the Securities and Exchange Act of 1934, as
      amended31.2
                  
                  Certification
      of Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a),
      promulgated under the Securities and Exchange Act of 1934, as
      amended32.1
                  
                  Certification
      pursuant to Section 906 of Sarbanes Oxley Act of 2002 (Chief Executive
      Officer)32.2
                  
                  Certification
      pursuant to Section 906 of Sarbanes Oxley Act of 2002 (Chief Financial
      Officer)




13




SIGNATURES




In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, there unto duly
authorized.




Universal Solar Technology,
      Inc.Date:
      August 13, 2009
                By:
                /s/
      Wensheng ChenWensheng
      ChenChief
      Executive OfficerBy:
                /s/
      Ling ChenLing
      Chen
                  Chief
      Financial Officer
                  (Principal
      Financial and Accounting
Officer)




14